Chinese tariffs of up to 25 percent on Russian and American steel

| 10 December 2009 13:53

This comes via Reuters:

China’s announcement on Thursday it would slap punitive tariffs on a type of electrical steel used in transformers is likely to hurt exports from leading U.S. producers AK Steel and ATI Allegheny Ludlum.

The move follows U.S. steel industry trade cases against China that led Beijing to accuse Washington of protectionism.

"This shows clearly that trade-remedy cases are a two-way street as are their disruptive effects," said Daniel Price, a senior partner at Sidley Austin who was a White House adviser on trade issues for former President George W. Bush.

China’s Commerce Ministry, announcing the decision, said this was the first time that China had conducted an anti-subsidy investigation against imported products, although it has previously launched many anti-dumping investigations.

U.S. and Russian exporters will from December 11 need to pay cash deposits equal to a percentage of the steel import value, but the ministry did not specify the amount, adding that it was a preliminary ruling.

It found that U.S. dumping margins on the steel product were 10.7 percent to 25 percent and that the subsidy rate was 11.7 percent to 12.0 percent.

The dumping margin on the Russian version of the steel product was 4.6 percent to 25 percent, the ministry added in a statement on its website (www.mofocom.gov.cn).

Last month the U.S. Commerce Department leveled preliminary anti-dumping duties ranging up to 99 percent on $2.63 billion in Chinese-made oil well pipes in the biggest U.S. trade action to date against China.

Russia also has tariffs in place against Chinese steel, including a 28.1 percent tariff on some steel pipes.

The official rationale for these tariffs is tit-for-tat protectionism. i.e. what is good for the goose is good for the gander.  I said a month ago that this was coming to a head. And indeed it has.

Will the U.S. and Russia escalate? The impulse toward protectionism should not be underestimated. Stay tuned.

Source

China slaps duties on U.S., Russian steel – Reuters

See also China Imposes Duties on U.S., Russian Steel Imports from Bloomberg.  The tone is much different, with one pundit calling this a PR stunt by China.

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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